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Walgreens Boots Alliance has agreed to pay $106.8 million to settle allegations of fraudulently billing the US government for prescriptions that were never filled, the Department of Justice announced on Friday, September 13.
The settlement resolves accusations that Walgreens violated the federal False Claims Act by submitting payment claims to Medicare, Medicaid, and other healthcare programs for prescriptions processed but not collected from patients.
Fraudulent Claims Against Walgreens
From 2009 to 2020, Walgreens was accused of submitting claims for prescriptions that were never picked up by patients. Instead of reversing these claims, the company resold the same prescriptions to other customers. This resulted in Walgreens being paid twice for the same prescriptions, leading to tens of millions of dollars in improper payments, according to the Justice Department.
The Deerfield, Illinois-based pharmacy chain, which operates around 8,600 stores in the US, did not admit liability in the settlement. In a statement, Walgreens explained that the issue stemmed from a software error.
According to CNBC, Walgreens also mentioned that it has already refunded $66.3 million related to these claims and has since corrected the error.
The settlement resolves three whistleblower lawsuits filed in Florida, New Mexico, and Texas. Steven Turck, a former Walgreens pharmacy manager who initiated the Texas case, will receive $14.92 million from the settlement. Andrew Bustos, a former Walgreens district pharmacy supervisor who filed the New Mexico case, will receive $1.62 million. These cases were brought to light by former employees who reported the fraudulent billing practices.
Walgreens has cooperated with the Justice Department and taken substantial steps to prevent future issues. The company has committed to upgrading its pharmacy management systems to avoid similar billing problems in the future. The Justice Department acknowledged Walgreens' efforts in improving its internal controls and systems, which played a role in determining the settlement amount.
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Walgreens Store Closures
In June, Walgreens announced plans to close a significant number of underperforming stores over the next few years. This decision comes amid the fallout from the fraud case and the company's ongoing efforts to streamline its operations.
Despite the settlement, Walgreens has stated that it is dedicated to improving its operations and ensuring compliance with all regulations.
The $106.8 million settlement marks a significant resolution to allegations that Walgreens engaged in fraudulent billing practices. While the company has not admitted wrongdoing, it has taken steps to address the issue and prevent future incidents.
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